Analysis from Deloitte has revealed a slight decrease in UK retail administrations for 2019.
The number of UK retail organisations that entered administration last year was 124, which is ever-so-slightly lower than the 125 in 2018, according to insolvency figures released by Deloitte.
This is despite the fact that there was a sharp year-on-year increase in UK retail administrations in December 2019 – 11 were recorded compared to seven in December 2018, which equates to a rise of 57%.
Deloitte also found that there was an increase in large multi-site retail administration appointments in 2019 – up to 28 from 26 the year before, while the number of employees of those large retailers entering administration more than doubled in the year-on-year comparison – up to 50,586 in 2019 from 23,691 in 2018.
Last year was understandably described as a “challenging” one for CEOs and employees in the sector by Dan Butters, partner and head of restructuring services at Deloitte. He put the increase in administration down to a number of factors.
He said: “2019 has proven to be another challenging year for retailers. Whilst the number of retail administrations has remained broadly flat on 2018, we have seen an increase in the number of large retailers entering into administration.
“December’s increase is most likely a reflection of increased complexity associated with the implementation of CVAs and further pressure on the high street as a consequence of structural change.
“We have seen consumer confidence and footfall drop in 2019, which has been further exacerbated by narrowing margins from high levels of discounting – driven by a highly competitive pricing environment.”
Deloitte is confident that 2020 may be more positive, in part thanks to the business rates announcement in the Queen’s Speech.
Dan Butters added: “Entering a new decade brings fresh opportunities for retailers, particularly with a review of business rates as announced in the Queen’s Speech in December.
“With this in mind, 2020 may see improvement in the retail environment for a number of retailers.”